Delhi Power Regulator Orders Discom To Pay Licence Fee

The national capital's power regulator DERC has directed the New Delhi Municipal Council (NDMC), a deemed power distribution licensee, to pay a licence fee at the rate of 0.05 per cent of the annual billed amount and a late payment charge, effective from 2003-04.

Taking suo motu cognizance of the non-payment of licence fee by the NDMC, under section 142 of the Electricity Act, 2003, the Delhi Electricity Regulatory Commission (DERC) had reserved its judgement in August last year which was pronounced earlier this month.

The commission has directed the NDMC, having over 46,000 consumers in Lutyens' Delhi, to comply with its direction within a period of three months.

A senior NDMC officer said a comment on the issue can be made after going through the DERC order.

A copy of the DERC order stated that the Accountant General (Audit) on March 8, 2019 had made an audit observation that the NDMC is a deemed licensee to supply electricity in the area under its Jurisdiction.

It was also observed that the NDMC, being a deemed distribution Licensee under The Electricity Act, 2003, is liable to pay 0.05 per cent of the annual amount billed from the year 2003-04 onwards and an interest at the rate of one per cent per month on the delayed payment.

The NDMC counsel appearing in the matter had argued that under section 197 of New Delhi Municipal Council Act, 1994, the council is a deemed licensee under the old Act. Therefore, they continue to be a deemed licensee and are not required to take a licence under section 14 of The Electricity Act 2003.

It was observed by the DERC, however, that by enactment of The Electricity Act, 2003, the earlier Electricity Act, 1910 was repealed.

Section 14 of The Electricity Act, 2003 deals with the grant of licence.

The commission said that licences to discoms BRPL, BYPL and TPDDL, have been in line with the Delhi Electricity Reforms Act (DERA), 2000, under which they pay a fee equivalent to 0.05 per cent of the amount billed during the previous financial year.

It further said that only those provisions of DERA are protected under section 185(3) of The Electricity Act 2003 that are consistent with its provisions.

"The provision about exclusion of NDMC as contained in DERA, 2000 cannot get shelter of section 185(3) of The Electricity Act, 2003. Thus, after coming into force of the enactment of The Electricity Act, 2003, the argument of the NDMC that it is not required to pay licence fee loses ground and has no merits," the DERC said in the order.

The NDMC counsel had argued that the Delhi Electricity Reforms Act, 2000 under which the Delhi Electricity Regulatory Commission Comprehensive (Conduct and Business) Regulations, 2001 were framed as an enactment in the schedule to The Electricity Act, 2003.

"Regulation 1(4) of the DERC Regulations, 2001 is saved by virtue of Section 185 (3) of The Electricity Act, 2003, and therefore, the DERC Regulations, 2001 (including provisions relating to License Fee) do not extend to the NDMC," he had submitted.

The commission, however, ruled that Section 12 of The Electricity Act 2003, provides that no person shall distribute electricity unless he is authorised to do so by a licence issued under Section 14 or is exempted under Section 13 of the 2003 Act.

"NDMC is not exempted under Section 13 of the Electricity Act 2003, it has to distribute electricity under a licence, whether obtained on application or as a deemed licensee," it said.

It was also noted by the DERC in its order that the Electricity Act, 2003 does not prohibit it to levy licence and that the commission has to have a "non-discriminatory approach".

The commission concluded in its order that the NDMC being a deemed licensee, the provisions of licence fee and interest on delayed payment of licence fee would also be applicable to it in order to create a level-playing field for other discoms, including the BRPL, BYPL and the TPDDL.

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